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Your financial planner has just completed an analysis of your fixed-income holdings. She has determined each of your after-tax yields, but is cautioning you that the tax implications of your holdings could change if Congress changes marginal tax rates. Based on the following after-tax yields, which of these bonds would offer the greatest after-tax return if your federal marginal tax bracket increased from 25% to 30%, while your state marginal bracket remained 4.5%?
• A corporate bond with a 5.1% after-tax return
• An out-of-state municipal bond with a 5.0% after-tax return
• An in-state municipal bond with a 4.8% after-tax return

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